1.What is the budgeted sales price per unit?2.What is the budgeted variable expense per unit?3.What is the budgeted fixed cost for the period?4.Compute the master budget variances. Be sure to indicate each variance as favorable (F) or unfavorable (U.)5.Management would like to determine the portion of the master budget variance that is (a) due to volume being different than originally anticipated and (b) due to some other unexpected cause. Prepare a flexible budget performance report to address these questions, using the actual sales volume of 52,500units and the budgeted sales volume of 50,000units. Use the original budget assumptions for sales price, variable cost per unit, and fixed costs, assuming the relevant range stretches from 45,000 to 57,500 units.6.Using the flexible budget performance report you prepared for Requirement 5, answer the following questions: a.How much of the master budget variance (calculated in Requirement 4) for operating income is due to volume being higher than expected? b.How much of the master budget variance for variable expenses is due to some cause other than volume? c.What could account for the flexible budget variance for sales revenue? d.What is the volume variance for fixed expenses? Why is it this amount? Data TableADThe Lively Balloon CompanyActual vs. Budget Performance ReportFor the Month Ended August 311MasterMasterBudgetVariance4ActualBudget5 Sales volume (number of cases sold)52,50050,0006 Sales revenue$ 182,000 S 165,0007 Less: Variable expenses79,50070,0008 Contribution margin$ 102,500 S 95,0009 Less: Fixed expenses70,20069,00010 Operating income32,300 S26,0002.3. The Lively Balloon Company produces party balloons that are sold in multi-pack cases. To follow is the company's performance report in contribution margin format for August:E (Click the icon to view the performance report in contribution margin format.)Read the requirementsRequirement 1. Whatthe budgeted sales price per unit?The budgeted sales price per unit is

1.Budgeted sale price per unit= Budgeted sales revenue / budgeted sales volume $165000/50,000 =…

Answered: . What is the budgeted sales price per…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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1.	What is the budgeted sales price per unit?
2.	What is the budgeted variable expense per unit?
3.	What is the budgeted fixed cost for the period?
4.	Compute the master budget variances. Be sure to indicate each variance as favorable (F) or unfavorable (U.)
5.	Management would like to determine the portion of the master budget variance that is (a) due to volume being different than originally anticipated and (b) due to some other unexpected cause. Prepare a flexible budget performance report to address these questions, using the actual sales volume of 52,500units and the budgeted sales volume of 50,000 units. Use the original budget assumptions for sales price, variable cost per unit, and fixed costs, assuming the relevant range stretches from 45,000 to 57,500 units.
6.	Using the flexible budget performance report you prepared for Requirement 5, answer the following questions:
	a.	How much of the master budget variance (calculated in Requirement 4) for operating income is due to volume being higher than expected?
	b.	How much of the master budget variance for variable expenses is due to some cause other than volume?
	c.	What could account for the flexible budget variance for sales revenue?
	d.	What is the volume variance for fixed expenses? Why is it this amount?

Data Table
A
D
The Lively Balloon Company
Actual vs. Budget Performance Report
For the Month Ended August 31
1
Master
Master
Budget
Variance
4
Actual
Budget
5 Sales volume (number of cases sold)
52,500
50,000
6 Sales revenue
$ 182,000 S 165,000
7 Less: Variable expenses
79,500
70,000
8 Contribution margin
$ 102,500 S 95,000
9 Less: Fixed expenses
70,200
69,000
10 Operating income
32,300 S
26,000
2.
3.

The Lively Balloon Company produces party balloons that are sold in multi-pack cases. To follow is the company's performance report in contribution margin format for August:
E (Click the icon to view the performance report in contribution margin format.)
Read the requirements
Requirement 1. What
the budgeted sales price per unit?
The budgeted sales price per unit is

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

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